Don't see how that's possible without the OS exposing some kind of API, or if the browser latches on to that API. Either way, there is no portability here. Your best bet is Java, not JavaScript, or maybe just plain ol' Flash.
I'm sure it would be relatively trivial to make an activex plugin to support <video> and <audio>. The trick is getting the IE drones to actually install it... most of them are still using IE6, which is now 2 versions behind as of a few weeks ago.
What is the point of hiding the Flash interface in favor of a js powered interface? This thing still relies on Flash. IT is a cool demo but completely roundabout to add an extra layer of abstraction in the form of js.
Well it is nice to have the interface in javascript. Easier to build in to a normal page and change styling without having to open up a flash editor and re-compiling.
When coding a flash app, keep all interface elements externally as an imagemap(an external png with UI elements in it and an xml which defines the coordinates of ui elements in the png). Then reskinning would require only updating the imagemap rather than recompiling the swf.
By hiding the flash core ,basically they are exposing the flash apis to javascript .This would be helpful for frontend developers who are not comfortable with flash, but want to build a decent mp3 player .Other than the advantage for developers , i dont really think there is any functional advantage for the end user.